China puts clamp on global dirty property money


Here’s an article from the FT that will send a shiver through the entire politico-housing complex:

The anti-corruption campaign which has swept across China in the last two years has gone global, as Beijing seeks to enlist the help of western democratic governments in pursuing officials who flee overseas.

Underlining Beijing’s rising economic and political clout, Communist party officials have already launched an investigation into assets and individuals based in New Zealand, a country that counts China as its biggest trade partner. It is unclear whether that investigation was conducted inside New Zealand or from China, but investigators have requested permission to interview people in the country.

In an operation labelled “Fox Hunt 2014”, the party’s Central Commission for Discipline Inspection, a shadowy organisation with a controversial human rights record, has set up a dedicated office to investigate allegedly corrupt officials who have absconded or sent relatives and assets abroad.

Beijing-based British, US, Canadian and Australian diplomats say they are all under increasing pressure to assist with the Fox Hunt campaign. Hundreds of officials and their associates have taken flight from China amid President Xi Jinping’s ever widening anti-corruption campaign.

I can only repeat, peeps, hit the property bid now.

Houses and Holes
Latest posts by Houses and Holes (see all)


  1. At last some hope for justice in our crony FIRE sector. What a shame for our government – Australians to wait a foreign government to enforce our FIRB regulations.

    • Yep.

      I can see why people are wanting to escape China after participating in corruption, however, 2 wrongs do not make a right – breaking the FIRB policy is illegal and must translate to deportation from Oz as a criminal on character grounds.

      • It’s more of a misdemeanour (in the unlikely event you are caught). Deportation seems harsh. And impossible if you reside elsewhere.

      • Agree – you need some sort of legal framework and agreement to repatriate someone normally. However, it does raise two interesting questions:

        (a) if in the absence of that particular legal framework to send them back to China, does that preclude China’s ability to prosecute and seek repatriation of funds especially if acquired illegally? From my understand it does not; and

        (b) if the person in question has immigrated on business/commercial arrangement with that new country, (e.g. US, Canada, NA, OZ or the UK), with a quantum of money being the basis of those commercial arrangements. If it disappears, or is found to be acquired illegally, will not the persons involved be repatriated anyway, purely on the basis that they no longer met their orginal immigration requirements? And I think the answer on that basis is yes.

      • @3d1k your tolerance to this illegal activity is astounding. Every single established home that is purchased illegally is another home unavailable, by law, to an Australian. The penalty must reflect the effect of the crime, which is denying an Australian a home. Denying such a criminal a home in Australian is completely morally fitting, unlike the token/theoretical $80k fine.

        Edit: @RT good points. More amunition to see this illegal activity and those that do it addressed.

      • Any effective FIRB policy would see penalties and heavy fines for all parties to the transaction, not just the buyer, but seller and agent as well. That would stop it in its tracks.

      • @mm Yes, all those complicit in the crime must pay. This is a criminal not a civil issue, and at a minimum they’re all guilty of being traitors to this country.

      • Andy,


        3d1k takes a very pragmatic view and considers anything that gets in the way of a deal as dispensable.

        3d1k is likely to be thinking about the following objectives:

        1. How the mining industry can continue to sell our mineral resources to China and secure the largest return to senior management and shareholders (in that order)

        2. How we can continue to attract mostly ill gotten Chinese Wealth smuggled out of China past the CCP, to maintain our inflated asset prices, without damaging objective No 1.

        A challenging assignment for the Kissinger loving crowd.

      • It took some work but eventually I got the punch line.

        A reference to zinc cream?

        Or that there are lots of Anglos

      • That is correct, according to its website it functions purely as a body to advise the Treasurer, who always has the final call:

        “The Foreign Investment Review Board (the FIRB) examines proposals by foreign persons to invest in Australia and makes recommendations to the Treasurer on those subject to the Foreign Acquisitions and Takeovers Act 1975 and Australia’s foreign investment policy

        Note first sentence :”Australia welcomes foreign investment.”

    • Strange Economics

      Perhaps China can be asked fund the FIRB for some staff. for “foxhunt”.
      Could be an export earning business opportunite for them.

      Or we could just outsource FIRB compliance to China who appear well equipped,
      or event replace FIRB staff with cheaper 457 workers.
      The govt loves costcutting and 457s, this could be profitable !

    • “At last some hope for justice in our crony FIRE sector. What a shame for our government – Australians to wait a foreign government to enforce our FIRB regulations”

      Yes spot on. How amazing is this.

      Hey maybe while they are at it we could outsource our law an order system to China as well.
      We could get them to investigate OUR corrupt politicians and while they are at it they could bring back the death penalty here and have a real justice system.

  2. “…individuals based in New Zealand…” And we in NZ do not have any FIRB rules to speak of…and still…they look! I wonder if you are next?

  3. Hat Tip to TheRedEconomist who picked up on this phone discussion on 2GB yesterday morning and linked to it over on the Hockey bubble posting…..

    ……..a chat with Kelly O’Dwyer vis FIRB and foreign investors in Australian real estate, with a further comment about her personal views on using super for a deposit by FHBs, followed by a brief discussion with John Symond on the same Super/FHB line.

    The interviewer gives

    I transcribed it in part – dont have time to do more.

    Great spot…..

    From the 21.30 mark

    Her points….

    not a prosecution since 2006…demonstrates they have been asleep at the wheel

    under Rudd/Gillard government not one prosecution, under Howard there was divestment orders

    Lack of data..

    needs to be much stronger civil penalties in place, applied by FIRB

    she has found the evidence FIRB provided to be pretty weak, in terms of their investment and compliance regime

    she does not think they have been making the best of the resources they have….

    He asks if she has evidence that foreign investors have been cheating the system:

    ‘The point I would make is this. If people feel that there is no penalty for non-compliance with our foreign investment regime, they are going to take the risk. Because the upside is so very very large. So, for instance, under the current laws at the moment, if they were to find that a non-resident foreign investor purchased multiple properties, contrary to our current laws that are in place, they do have the power to divest people of those properties. We know that that hasnt been happening. They can divest people of those properties under law, and even if they do divest people of those properties, at the moment someone can keep the windfall gain that they might make if that property increases in value. Now I think that is completely ridiculous.

    what about the fines?

    we have heard from many people that this is seen as just the cost of doing business

    what about those helping foreigners to get around the law?

    at the moment the only penalties that really apply are to the actual purchasers themselves………In fact what we think should be applicable is catching a number of those people who might also deliberately help people to contravene the rules. So you would be looking potentially at real estate agents, lawyers and also accountants who might be involved in trying to contravene the foreign investment framework.

    does she have any evidence foreign buyers have influenced property buyers?

    We have been getting contradictory evidence on this point. And it depends on who you talk to. We heard evidence from the RBA who believe there is some impact on the high end of the property market where they think that some of the foreign investment dollar is actually going. We also know though that quite a lot of the foreign investment dollars goes into the apartment market as well though where they are competing for investments in residential apartments. And we heard a bit of evidence from one of the economists who came to give evidence before us, that this apartment market now is really the market for first home buyers – First home buyers are no longer doing what they used to do traditionally – which is purchase existing homes but instead, because of the price point, they are looking to purchase less expensive property, an apartment, just to get themselves into the market

    You also expressed the view today that First home buyers should be given the chance to use their superannuation fund as part of the deposit…..

    I feel really sorry for the first home buyers who are trying to crack into the property market. To me it seems that a lot of people, in order to crack into the property market, need to have two incomes and need to save for quite a period of time to get a deposit together. Or they need some family assistance in order to get into the property market, which is very difficult for those people who dont have the means to do that. So why shouldnt young people have the ability to access their own cash, which is their superannuation, in order to purchase an asset that they are going to be able to live in? I think that we should be considering this. It is a personal view that I have expressed.

    out circa 30 mins…….

    back in circa 34.30

    presenter poses question of whether young home buyers using their superannuation simply pushes up prices, would there need to be a law to enable those people to get money back again…

    John Symon ‘Aussie John’

    poses question of Symon on whether he thinks FHBs should be able to use super….

    Well I am all for accessing superannuation towards a deposit for first home buyers on the strict rules that that money, as soon as they go to sell, that money has to go back to their super fund. Because we dont want to see them blowing that money because that super fund is there for later years, retirement and also act as a buffer for government, social security budgets. But I am all for accessing super, there are billions and billions and billions of dollars sitting there,and if it can help young people get into home ownership, well and good. I dont subscribe to the view it would blow housing to even higher heights because today first home buyers account for less than 50% of the level what their average involvement in housing has been over 15 or 20 years.

    ……sorry I dont have time right now to transcribe the rest, but it is worth a listen. Symond obviously is incapable of envisaging a world where house prices dont go up and where people buy and sell lots of house to make money.

    The presenter (I dont know him) seemed reasonably informed, but didnt touch O’Dwyer on the implications of some of what she was saying – ie would there be an audit of sales in the past, but worth a listen – the phone callers included a guy giving a reference to Macrobusiness and the presenter said he followed here sometimes.

    • Thanks for the transcription Gunna

      There are some worrying utterances from KOD

      Beware the sham fix for the sham regulator

      Increasing the fines is a sham fix. An empty pretence.

      She keeps harping on about the fines being “the cost of doing business”. They are not. Noone has been prosecuted in 6yrs.

      Where is the data Kelly? How many existing dwellings are owned by foreign nationals? Why can’t you tell us this very basic number?

  4. TheRedEconomistMEMBER

    Ross Greenwood spokes to the Chair of the House of Reps. Economic Committee Kelly O’Dwyer about the FIRB failing to enforce property rules last ngiht

    You have to worry though when she offers her “personal” view that FHB’s can access there Superannuation balances for deposits.

    Here idea’s were later smacked down by an emailer and caller to Ross.

    I thnk Ms O’Dwyer is a clear populist. Whilst highlighting the inaction of the FIRB she bags the Rudd/Gillard Government then suggest FHB’s could access there Super.

    No mention of investor crowding out FHB’s or poor land release policies.

    • That is definitely the view I came away with.

      She mentioned nothing about past sales (which she concedes are likely to have been flawed).

      She talks about people ‘helping people get around the laws – lawyers and accountants – without recognising that it is an industry, part of the banking industry.

      They had had the chief of Austrac on earlier and yet there was no mention of how people turn up with suitcases of cash at auctions and blow other bidders away. Similarly there was no mention of ever looking at the provenance of the money arriving in Australia.

      • On lateline or the business last night they included comments by a developer about O’Dywer’s FIRB comments.

        He made it quite clear that any impediment on their ability to sell Australian property and land off shore would be very unwelcome.

        Considering that at best she is only talking about enforcing the existing laws, it gives some idea just what is going on at the moment.

        Anything goes.

      • Good point TP.

        No restrictions other than only new builds should increase demand for their product.

        He may have been thinking about LNP introducing rules like the ones in HK and Singapore. Extra taxes etc on off shore sales.

  5. Great. Forget a 93% increase in Chinese demand for Australian property YoY, it will be 500% now as the rats desperately seek liberation from their sinking ship. They ruined their own market now they ruin ours.

    • Hong Kong, Vancouver, Auckland, Sydney, Melbourne. It’s like a financial Ebola, contaminating the entire Pacific.

      • I was thinking more of a plague of locusts sweeping across the financial & cultural landscape, but your imagery works too. 😀

      • Spot on. The criminal Chinks are systematically dumping their proceeds of crime overseas before they get caught in China, and destroying our country at the same time.

      • Add New York, where many Manhattanites are being priced out of their local housing market by Chinese. New York isn’t on the Pacific though

      • @StatSailor

        It’s interesting what is happening in New York. Long Island is having a big influx of foreign Chinese buyers and moving their families there, pricing out locals. one of the firsts things they want to do is create a new China town to cater for growing Chinese population.

      • That’s funny as you say.

        I see they have eight different Chinatowns within NYC, segregated according to Chinese region of origin, two in boroughs on Long Island (Brooklyn’s Little Fuzhou and another in Corona. Queens) and multiple earlier immigrant groups have been displaced by Chinese immigrants since the ’90s.

        Possibly you’re talking about Little Fuzhou, which seems to be the newest Chinatown?

      • @ Powermonger
        “I was thinking more of a plague of locusts . . .”

        Scientists recently figured out what instigates a plague (of locusts), i.e. what turns a group of solitary grazing locusts into a swarming plague.
        The swarming starts when there is increased risk of being cannibalised.
        “Most people might think the reason the insects change behavior is so that they can swarm much like bees absconding from an established hive to create a new one, but locusts are actually at the opposite extreme. They are desperately trying to escape fellow locusts who are trying their best to make a meal of them and anything else that gets in their way. Swarming is just the outcome of this process.”

    • Andrew Wilson on ABC this morning with Marius Benson

      BUT BUT BUT Chinese buyers account for 4% of total buying
      (Sydney investors are 50% of markets)



      • The good old obfusication argument from Mr Wilson. If it was 4% the government wouldn’t be holding the enquiry as they’d have proper stats but they also completely ignoring that the same phenomenon is happening in other parts of the world.

  6. Well yes, regardless of what FIRB is doing I’ve always thought it curious that the CCP is allowing so much money to flow out of China.

    • Hmmm … that was my reply to Bluey’s thoughtful analysis (deleted by mods) that mentioned something about bogans and Australia being full.

      • There is an irony in how much we get so stressed about all this and at the same time vilify those who would not only fix it but would have prevented it occurring in the first place.

        I’ve got a task for you Lorax go and ask somewhere on the Internet, Facebook I suppose, about what the Greens immigration intake would be and come back and show me. Chop chop. Thanks.

      • FWIW, I agree that the Greens are conflicted on this issue. On one hand they want to allow all asylum seekers in, and on the other they want to cap Australia’s population for sustainability reasons.

      • I’m with you Bluey Lorax is one of those people who, at every opportunity, can’t wait to tell you how nothing will ever change so suck it children!

        Much like 3d, I guess that’s why Researchtime is always saying it’s a much better world with them in it…

      • FWIW, I agree that the Greens are conflicted on this issue. On one hand they want to allow all asylum seekers in, and on the other they want to cap Australia’s population for sustainability reasons.

        Around 25-30,000/yr would seem to be the targeted humanitarian intake:

        I don’t really see a conflict here unless you subscribe to the “fortress Australia” principle that we shouldn’t allow anyone in, ever, for any reason.

      • So you agree they’re conflicted Lorax and you won’t get a straight answer. I might email them myself.

        So you’re wrong and I’m right. I win.

        Smithy 30k refugees would be fine if we reduced immigration to more or less 80k.

        That’s SPPs stance.

      • Mig Lorax wants a slow melt so her kids can buy at the trough. MB has factions. This must be what being a Labor member feels like. 🙂

      • What did I do to upset you Mig? Are you still p*ssed off that Saint Bob Day turned out to be just another rentseeker?

        I don’t want housing to crash at the same time as mining is crashing in a Houses and Holes economy. The resulting economic catastrophe would be far, far worse for the young than unaffordable housing. A slow melt is the best outcome, and I’m pretty damn sure that’s the official MB view from DLS and Leith.

        Bluey, please show me anyone, anyone at all, from the conservative side of politics that isn’t 100% behind Big Australia. On the left I can at least point to Kelvin Thomson.

      • I don’t care about Bod Day but at every possible opportunity for change you pop up to say — nah don’t worry about it, nothing will ever change.

        That’s the kind of “stay home and relax” shit I’d expect from Howard supporters..

      • but at every possible opportunity for change you pop up to say — nah don’t worry about it, nothing will ever change

        Huh? Like what? You won’t find a stronger advocate removing all the rorts that boomers enjoy. Just because I don’t want to smash the joint doesn’t mean I don’t want change.

      • Slow melt is BS – We’ve already done 5-7 years of land price inflation in the last year for example. Let that sink in. 5-7 years worth of inflation in 1. But price rises are the lesser of 2 evils right?

      • Yeah whatever Andy, lets take the Zimbabwe option then shall we?

        I suppose every generation has to learn about recessions the hard way, but this one is going to be particularly nasty.

      • Lorax there isn’t anyone on the right that is anti big Australia, and there’s so few on the left that they may as well not exist.

        So in the context of Lib/Lab/Green sometimes I favour the right, because a smaller government and zero respect for aesthetics, the environment and inner city trendy nimbys will more likely result in more apartments and housing being built.

        Unfortunately the right comes with ugly stuff like denying people the dole for 6 months.

      • Bluey mate I’m with these guys

        The APG has been around since the early 90s and is spearheaded by Tasmanian lawyer Michael Mansell, with representatives and offices across the nation. It issues Aboriginal passports “as part of its policy of acting sovereignty”.

        “The act of presenting an Aboriginal passport to airports in other countries and when re-entering Australia shows you are committed to the principle that the Aboriginal nation is a separate nation from the Australian nation, and that Aboriginal people have inherent independent rights, including having a separate passport,” Mr Mansell says on the APG website.

        Fuck Team Australia and the proto fascists it rode in on

      • @Lorax Australia has taken the Zimbabwe option – that is, hyperinflation of land prices – for the majority of the last 15 years. Point?

      • The only thing we can learn from depressions is we NEED them!

        @andy the zimmy option is don’t sell to foreigners, sounds pretty good actually

      • What happened to you Bluey?

        Nothing. If we’re going to import a bazillion Asians I’m saying lets do it properly and build lots of stuff.

      • Y’know Bluey, I’m sympathetic to your reasons for sometimes favouring the right but as far as Liberal voters living in Melbourne suburbs such as Balwyn and Camberwell, I’d have said they were the biggest NIMBYs of all.

        Otherwise one of the most sensible re-developments, that of the airspace above Camberwell station might have gone ahead by now.

        In contrast, a bigger development in Labour safe-seat zone at Footscray station has gone ahead, with a huge skyscraper replacing a disused Telecom (yes Telecom) building and overshadowing a park formerly favoured by people looking for a place to drink at 9:00 am. Hopefully those early morning drinkers realise that there are more parks in the Boroondara local government area than in Footscray and you don’t need to recharge your myki to get off at an unmanned station.

        Liberals only favour development at least two or three suburbs away from where they live, just like everyone else.

      • Thanks @mig, didn’t know that but it does sound pretty good.

        And yes recessions are required as a natural part of the cycle, otherwise the compounding effects of early wealth breed extreme inequality between the haves & have nots (as we have now, and getting worse every day), plus, the concept of risk is dismissed. I want recession.

      • The only thing we can learn from depressions is we NEED them!

        You’ve lost all connection with reality haven’t you.

        Spoilt bloody Gen Y whingers. Never experienced a recession, never been out of a job, always had a roof over their head. You have no idea what hardship is. None. I’m not saying my generation (X) had it hard either, but at least we know that. We got a taste of things a few years into our working lives in 1991. Enough to know that recessions are bloody scary. By the time many of us were looking to buy a house (early 2000s) we’d missed the boat on property as well.

        Go ask the people that lived through the oil shocks and conscription in the 70s what hardship is, or the poor bastards who lived through the Great Depression and the war. Your idea of hardship is a bad latte or getting less than 10Mbps on your Wifi FFS!

        Yes houses are expensive. Yes the policies in this country are idiotic. Prices will correct eventually, and in the meantime invest in something else. Please just deal with it, and quit the incessant whinging.

      • Aaahahahahaha. Bravo Lorax, you’ve now turned into a carbon (*cough*) copy of 3d1k!!

        Brilliant. Have another cry Lorax just don’t pretend its for my benefit.

        Hahahaha Bravo!

      • Seriously what planet do you live in?? I know lots of people my age in Europe right now who don’t have any of those problems you talk about. And the ones that do aren’t starving near death — and Portugal can’t print EUR, but Australia can print AUD…

        Get over yourself.

      • You mightn’t want it, but you’d benefit from it. Mig’s right, you’re morphing…imitation the sincerest and all that.

      • Stat I agree libs are scumbag nimbys too.

        But they don’t rub salt into the wounds by calling people racist every two seconds. Which is why I favour lefty suburbs being fucked hard with as many high rises as possible first.

        Lorax the recession wasn’t that bad, and it’s certainly fair to say a depression is a necessary punishment.

        But I often enjoy not being a proper adult. House prices are an awesome excuse. You can’t win!

      • Until the great foreign investor property boom of 2013-14, Liberal voters didn’t need to worry about that race crap – they lived in suburbs, and sent their kids to schools, that were Anglo-skip only. No blacks, no dogs, no irish.

        I remember the reactions of some of my mother’s friends to a slight peppering of Asian faces in their kids $20k/ year school photo in the early ’90s. Can only imagine the reactions next year to the new colour balance.

      • Huh? Like what? You won’t find a stronger advocate removing all the rorts that boomers enjoy. Just because I don’t want to smash the joint doesn’t mean I don’t want change.

        I’m afraid you have to be either with us, or against us. Nuance and complexity are for fools.

      • I find most white people are OK with a few token Asians or other non whites. But get very nauseous when they’re in the minority. Bloody hypocrites. Being an IT guy I’m pretty used to it.

        Another reason why I want them fucked! Fucked I say. 😀

      • Smithy referencing fools? Well he would know… Nuances like being against the IMF reneging on a loan isn’t the same thing as being homophobic? Moron!

        Bluey is right and you’re part of the problem Lorax, our society is so villainous in expectation of higher house prices that even types like you seek to inoculate the wider society from the murmurs of the crashnik. House prices can NEVER go down. Never.

      • Tomorrow Senator Milne will deliver a major speech to the National Press Club on the future of climate policy in Australia.

        Ooooohhhh Wow thanks so much, then will you retrofit your office to the tune of half a million dollars ? Halfwit hypocrite morons

      • Yep. You and your ilk are the problem Lorax. You’re in the way. You’re occupying the section of politics we need.

        If you’re weak and indolent and half arsed you get walked over, and that is what you and your ilk are.

        Just a bunch of hippy pussies who don’t want to move on from 60s style protests. Move on man, it was the 60s man. 40 something years ago.


      • Why would I when I own a nice place on the North Shore of Sydney?

        Have a nice day, Keyboard warrior.

      • Yep. You and your ilk are the problem Lorax. You’re in the way. You’re occupying the section of politics we need. If you’re weak and indolent and half arsed you get walked over, and that is what you and your ilk are.Just a bunch of hippy pussies who don’t want to move on from 60s style protests. Move on man, it was the 60s man. 40 something years ago.Idiot.

        Er, what did I say? Are you off your meds today Bluey?

    • The rational reasons the CCP might have been willing to turn a blind eye include

      1. A way of keeping insiders loyal (let them have a perk)

      2. As a way reducing the risk of relying on buying US treasuries as a method of managing the value of the yuan – a giant distributed sovereign wealth fund.

      But it appears that neither was an objective and it is just a bunch of criminals and others trying to get wealth out of China without govt approval.

      Will be fascinating to watch how the govt plays this if the CCP decides to make us choose.

      1. Trade


      2. Wealth (much dirty) smuggled past the CPP

      • Who knows, the point is anyone can do whatever they like here. Send stolen millions no problem, pump up our housing bubble, no problem, dredge the barrier reef and walk away, no problem.

      • Yep, where money is concerned, anything goes. Australia is the dumping ground of greed and corruption.

      • Australia is a playground for the rich. No, more than that… a rent-seeker’s paradise. The rest of us are collateral damage. Once you understand this, everything makes sense

  7. HnH, your SELL call is a very bold position. RE is illiquid and lumpy and slow to transact. In the crisis very few will get away with their finances intact.

    The smart money has already sold down, sloughing poor assets, keeping the best and is carrying minimal debt to be able to buy back in after the land price reset. There might even be a rent correction as well, which would really hurt the geared.

    I have practiced shorting the market for a few years now simply by renting. A naked short that burned like hell every month when I paid the little landlord her rent. However, the numbers don’t lie. This was and is staggeringly cheaper than buying in this bubble market.

    Renters, outright owners and the lightly geared will be unharmed in the fall. A balance sheet contraction that is all in the mind, perhaps. The heavily indebted, however, are going to be scourged.

    The only question is when.

    Don’t Buy Now!

    • Good reasoning – and on the money. Its the reason why I rent too… but many appear to believe that its universal suffrage to own a house. Suggest live in Germany, vast majority of the population rent their entire lives.

      The big bid is coming… buy then IMHO

      • Do you have a family RT? Young kids? Need stability in your life. Want to get something fixed if its broken?

        I’ve rented a few times and i would put dealing with the grubby little landlords as the single most vile and ugly experiences of my life. I own my house outright.

        When i want to improve something i do it, when something is broken i fix it, if i want my house to clean and neat i can paint it.

        Renting makes economic sense at the moment because of the financialisation of housing but it not the preferred option for most. And don’t even dare compare the laws that support our grubby little debt pig landlords with the German system.

      • Suggest live in Germany, vast majority of the population rent their entire lives.

        That’s because in Germany, landlords understand they have responsibilities as well as rights.

    • Define lightly geared.

      Also, some regional areas can’t/won’t correct as much.

      I reckon our place has appreciated MAYBE 5% in 3 years (we’re on 10 acres in the Northern Rivers = identified high growth area), notwithstanding any property improvements (significant infrastructure and amenity improvements).

      Yes, fuelled by debt but LVR circa 80%. (that’s a 3 years ago value)

    • What do you mean by reciprocal tax arrangements? If you mean we collect for them and they for us – I doubt it.

      And yes Chinese can seek political asylum and I can think of many who would have decent claims (mostly the non Han minorities) but most of them do not have wealth in China they wish to get to Australia.

      • Pfh I asked the question because I didn’t know. As it happens China does have a tax treaty with Australia –

        but it doesn’t have an agreement to exchange data, which I assume it would need to get access to information on what it’s citizens own on our shores.

        I suspect that the reason that many Chinese nationals have sought to invest in Australia is because they feel that it’s unlikely that our government will hand over data to China, but I don’t know for sure. Maybe someone else here does

      • Australia was close to the first country to sign an extradition treaty with China (I think we rushed in to obtain a trade agreement) – Canada, for example, still doesn’t have one, so it is a much safer place for a Chinese criminal than Australia.

        A side effect of the extradition treaty is that the AFP and Chinese police from time to time run joint operations, which have obtained money laundering convictions (money embezzled from municipal government going from China to Aus) and drug smuggling convictions (drugs in both directions).

        The convicts proceeds of crime were split and divided between governments. When the Chinese government has evidence of bribery and embezzlement conducted by someone now residing in Australia, they just need to pick up the phone and the AFP will investigate where the money is now, albeit according to their own schedule. Obviously, however, the Chinese need to gather the evidence of crimes committed on Chinese soil.

        The previous cases have taken five or more years to complete investigations, then more years for court cases to be heard, so given the corruption crackdown started late last year or early this year, I guess it will be in the early 2020s that we will see results in terms of money confiscated if money from people caught in the corruption net has wound up here.

      • Yes – we have a tax treaty but that is simply setting out who gets to tax what. Which is important for people who may need to pay tax.

        I wouldn’t call that reciprocal though.

        If the govts start exchanging data or collecting tax on each others behalf that would be interesting and surprising.

        Watching how this plays out will be interesting. China has some large cards to play if it gets serious about stopping dodgy wealth leaving China.

        I am not convinced they are though. I think this is more a temporary campaign by the in crowd against the out crowd but anything is possible – China does have form when it comes to missionary zeal and rooting out ‘corruption’ – which may simply be not supporting the communist party.

        I just have doubts that many of those sending wealth out of the country are likely to be anti-communist rule of law democracy types. That is not usually how you get wealthy in China. Being part of the kleptocratic club is more usual.

        So if anyone is wealthy that would be a contra-indicator that they require asylum.

      • Not really. A lot of people China may name as “corrupt officials” we may see as political refugees.
        If we accept them as such should we ban them from owning a house or other assets once we grant them asylum. We have accepted many refugees from China in the past since the days of the long march.

    • No. re tax. China has also eschewed global OECD TP practice because it doesn’t suit their capital flows (probably fairly).

      Repatriating profits out of China is tricky, and part of this is proving the tax obligations are met.

    • Assuming this corruption purge is for real, i think it is very likely that we will see people claim political asylum. China executes officials and others for corruption, and Australia does not extradite people to face prosecution in country’s where they could face the death penalty.

      • If they moved their ill-gotten gains here we are happy to jail them for money laundering and send some of the money back to Beijing though,

  8. I guess we will get a FIRB with a spine after all. The only difference is that it will be headquartered in Beijing.

    • Yep,

      Unless the Chinese govt makes it very clear – choose between smuggled dirty wealth and those clutching it AND your ongoing trading relationship.

      Given that choice we will get a new FIRB overnight with NSA like powers of observation and supervision.

      If the Chinese govt is serious about corruption and wealth flight they can stop it in its tracks with a short fax to Mrs Bishop and Mrs O’Dwyer.

      • No chance coolnik – I have way too much respect for 3d1k – he is one of a handful of bloggers here with grey matter between his ears. Regardless of whether I agree with him or not, he is worth reading.

      • Well said PeterF and that goes for many bloggers around here. Don’t have to agree with them but a little respect goes a long way…

      • By respect, you actually mean too much in common. Yes?

        3d is an apologist and astroturfer for the 80% foreign owned mining industry.

        Peter is a debt sales man and an apologist for the massive private debt that we have run up in housing.

        The sell off of our national assets is closely linked to the private debt hell we have been bequeathed by our boomer politicians.

      • Nope AJ, by respect i mean proving their views wrong without defaming them or calling them names as a handful of other bloggers do. They have the right for their own views as much as you and I do.

        Re private debt, i agree with you but no one is forcing anyone to get into debt and since rents are so low these days people have a choice not to buy. It’s a personal choice and if people are not doing their due diligence and planning their finances right, it’s their fault, not the banks, not the brokers, not the RE’s…

      • @ PaulF

        The old ‘a sucker’s born every day’ defense. Used by the morally questionable for generations. No, it’s not the bank’s fault. It’s not the RE’s fault. It’s the buyer’s fault for believing them!!! Hang your head in shame.

      • @MM, no thanks and i don’t have anything to be ashamed of.

        I didn’t call anyone stupid.I said that no one is forcing anyone into debt.
        And to your point, if someone jumps into hundreds of thousands of dollars into debt without at least making their own risk analysis based on their current and future circumstances, than don’t you think it’s fair to say they it’s their fault?

  9. This is too funny.

    We’ve now become the go to mob for laundering and safe keeping the kleptocrats and triads loot, by pricing Australians out of house and home with the full approval of PARLIAMENT (listen to that opposition silence, it’s deafening). Parliament, traitors to their own countrymen, especially the young, almost to a man.

    What do we tell Xi Jinping’s commissioners when they come to recover said loot? No? Is protecting the Chinese kleptocracv by fast tracking them into Australian residency and citizenship worth losing billions in contracts for our minerals? Agriculture?

    Here’s a simple way to enforce the FIRB rules – anyone found breaking them will suffer confiscation of the property in question and they, their family and any one who helped them with their application to come here will lose all residency and citizenship rights in Australia.

    That will keep them awake at night.

    • IF you are a miner like BHP, RIO, etc, or in agriculture or in any business that depends much on doing business now or in the future with China, food processing, education, pharmaceuticals, bio tech, whatever,


      Demand the sacking of the Joe Hockey and demand a minister who’ll be tough on applying FIRB and weeding out those who are or have used Australian property or business investment to launder money out of China.

    • ‘Here’s a simple way to enforce the FIRB rules – anyone found breaking them will suffer confiscation of the property in question and they, their family and any one who helped them with their application to come here will lose all residency and citizenship rights in Australia.’

      I’d add to that, immediate loss of real estate licence for the agency involved, and 50% seller tax on proceeds of the sale, along with criminal charges on all parties to the transaction.

  10. In many ways we can compare Australia to Panama of the 1980’s – Noriega willingly accepted drug money and we, Australia, willing accept any money.

    In many ways we are also like Miami of the 1980s – their banks were made fat by dirty money, their skyline changed because of dirty money and they experienced an economic boom because of dirty money.
    We have hundreds, perhaps thousands of apartments under construction that wouldn’t be happening if not for Chinese money financing the developments or without Chinese buying the end product. This flows through everything –> increased employment –> increased GPD –> increased land prices –> increased taxes –>increased council rates –> increased commercial rents –> increased prices, etc, etc

    It is a disgrace that noone can actually quantify how many properties have been sold because of this. It is not in FIRBs, the Govs, or the RBAs interest to care. They don’t.

    This is not hyperbole.

    • Not hyperbole at all, Rich.

      The Oz banks are NOT financing the MEL SYD apartment boom. They red-lined the sector some time ago, unless 100 per cent pre-sold.

      So when we hear Vic Planning Minister Matthew Guy approve another 23 x 200+ meter tall blocks, it is foreign money selling to foreign buyers assets Australians will not occupy because the flats are too small.


  11. The Australian people have woken too late to the path the greedy boomers have put us on.

    We are locked into a population ponzi, an ecological sell-off and an unfettered development fest.

    Hope you all love brazil. Remember that equality thing, its not for us any more, it’s all fun until its your family in the ghetto.

    • Sydney is already full of ghettos, the population ponzi has made sure of that. Division not unity has been the result.

  12. LOL. Interesting how the West are so willing to turn a blind eye that they must be ‘pressured’ into helping. Australia’s officials need to be investigated and tried for treason.